(Reuters) – Shares of Boeing rose on Monday after a report said China was considering ending its freeze on purchases of the planemaker’s best-selling 737 MAX aircraft after more than four years.
This, coupled with bumper jet orders from Middle Eastern airlines at the Dubai Airshow, sent Boeing shares up 4%. Supplier Spirit Aerosystems also rose 2.7%.
China is considering resuming purchases of Boeing’s 737 MAX aircraft when the U.S. and Chinese presidents meet this week at the APEC summit, Bloomberg News reported on Sunday, citing people familiar with the matter.
The resumption of 737 orders from China would be meaningful to Boeing’s bottom line over the next six to 18 months, said Thomas Hayes, chairman of hedge fund Great Hill Capital.
Deliveries of Boeing’s bestselling 737 MAX to Chinese airlines were halted following two deadly crashes.
Boeing also secured orders for 125 widebody jets worth more than $50 billion from Emirates and its sister airline flydubai at the opening of the Dubai Airshow on Monday.
Demand for the industry’s biggest jets that dominated the region’s airports is humming after a prolonged cyclical downturn followed by the damaging effect of COVID-19 on long-haul travel.
Carriers have been placing orders with urgency as planemakers’ backlogs have grown and as jet deliveries have been pushed out toward the end of the decade.
“Potential reopening of the 737 in China for Boeing and the contracts at the Dubai Airshow is all kind of the perfect combination of optimism and positive outlook that the stock has been needing for many months where it has underperformed,” Hayes added.
Boeing shares were trading at $205.15, compared with analysts’ current median price target of $250, according to LSEG data.
(Reporting by Shivansh Tiwary and Ananya Mariam Rajesh in Bengaluru; Editing by Shilpi Majumdar)
